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Time running out for proposed Illinois Medicaid cuts

Kurt Erickson

May 16, 2012

SPRINGFIELD — The clock is ticking on Gov. Pat Quinn as he attempts to convince Illinois lawmakers to reduce the state’s massive Medicaid costs by

$2.7 billion.

For any funding reductions to take effect when the new fiscal year begins July 1, the Quinn administration must give the public a chance to have input into any changes. The deadline to submit a public notice about the comment period ends Monday.

The possible flurry of last-minute negotiations over the state’s Medicaid problems comes as the General Assembly is juggling several controversial and complicated issues.

Along with the possible Medicaid changes, Quinn is pushing for an overhaul of the state’s underfunded employee pension systems. Because of their impact on state spending, both issues must be dealt with before the House and Senate can put the finishing touches on next year’s spending plan.

Quinn wants to cut the rate it pays to hospitals for providing services to low-income patients by an estimated

8 percent.

He also wants to eliminate scores of specialized Medicaid programs, tighten eligibility for some programs and more than double the state’s cigarette tax to come up with $2.7 billion.

Quinn said that without the changes the state’s funding woes will get worse.

“Our Medicaid system, if we don’t restructure it, we’ll be $21 billion in debt,” Quinn said Monday after a speech in Chicago.

Quinn said he wants action by lawmakers soon so they can begin putting the state budget together. If the House and Senate don’t meet the $2.7 billion target, the governor suggested that cuts will be made elsewhere in the budget.

“That will help us have the resources we need for our schools and for our health care and for our human services and our public safety,” Quinn said.

Hospital officials say they’ll have to impose significant cuts in services if the rates are cut. In addition, the hospitals could try to offset some of the reduction by jacking up rates charged to private insurers.

The threat of a rate reduction already has had an effect on some hospitals.

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In Carbondale, for example, Southern Illinois Healthcare has put an expansion project at the hospital on hold while it waits for the dust to settle in Springfield.

Opponents of the possible rate reduction, including Republican lawmakers and the Illinois Hospital Association, argue the state could find savings by removing ineligible recipients from the Medicaid rolls. The estimated $720 million in savings could be used to offset rate reductions.

The cigarette tax increase also faces an uncertain fate in the Legislature. A $1 per pack increase has been proposed as a way to raise $675 million, but House Speaker Michael Madigan, D-Chicago, said earlier that he doubts it could make it through the House because of GOP opposition.

The hospital association supports the cigarette tax increase, saying it believes Quinn’s estimates on revenue could be on the low side.

“We think it could be higher,” Chun said, citing an estimated revenue projection of $750 million annually.